1. HEMI has a perpetual inventory system with purchases and sales being recorded by its computerized inventory system using the weighted average cost method. HEMI has purchased and placed heavy equipment transmissions at Suncor in Fort McMurray on consignment. Suncor benefits from having the spare part readily available and HEMI saves on storage costs. Accountant has been asked by HEMI's management to provide a profitability report for the consignment arrangement with Syncor. The Accountant extracted the sales ($20,500,000) and cost of sales ($18,504,180) numbers from HEMI's accounting system. The Accountant wants you to: a. Compute the gross profit using the first-in-first out (FIFO) method of costing inventory and the following purchase and sale information (show your calculations): 2. HEMI's management is cost conscious and does not spend money unless the benefits exceed the amount spent. Accountant understands that physical inventory count is good internal control practice; however, he wants you to explain the benefit of a physical inventory count when HEMI has a perpetual inventory system and the inventory is physically protected. 3. Accountant wants you to evaluate the following major transactions and provide adjusting journal entries, if necessary. For each item, explain why you are (or are not) adjusting HEMI's current account balances and provide supporting calculations for adjustments: a. On December 21,HEMl ordered 25 transmissions for a total cost of $15,000,000 which were shipped on December 27 with the terms FOB Destination. This inventory was not received at year-end and has not been recorded in HEMI's accounting records. b. There is a product in inventory that cost HEMI $11,000,000 which management has indicated will be sold close to its cost. Management is estimating selling price to be $12,000,000 and HEMI will have to pay the transportation costs of approximately $2,000,000 on behalf of its customer(s)